Slide 1: Austrian Post Investor Presentation FY 2014
AUSTRIAN POST INVESTOR PRESENTATION FY 2014 Georg Pölzl/CEO, Walter Oblin/CFO Vienna, March 12, 2015
Slide 2: Highlights and Overview
1. HIGHLIGHTS AND OVERVIEW 2. Strategy Implementation 3. Group Results 2014 4. Outlook 2015 INVESTOR PRESENTATION I Investor Relations I Vienna, March 2015 2
Slide 3: Highlights 2014
HIGHLIGHTS 2014 Market environment Hardly any economic Basic trend of Retail sector and thus Growth in impetus and strong e-substitution of letter advertising customers e-commerce drives competition in the mail is continuing under pressure parcel volumes B2B parcel market • Slight revenue increase o
Slide 4: Clear Capital Market Positioning Confirmed Once Again in 2014
CLEAR CAPITAL MARKET POSITIONING CONFIRMED ONCE AGAIN IN 2014 BUSINESS MODEL WITH A STRONG BALANCE SHEET & RESILIENT CHARACTER SOLID CASH FLOW 2,211 2,304 2,349 2,367 2,371 Revenue 172 Free CF before EUR m 156 151 154 152 acquisitions/ 7.7% 7.9% 8.3% Securities 6.7% 7.1% EUR m EBIT margin % 40.3% 42
Slide 5: Slight Improvement in Revenue in 2014
SLIGHT IMPROVEMENT IN REVENUE IN 2014 REVENUE DEVELOPMENT EUR m +0.2% GROUP: 2,366.8 2,370.5 • 2014 revenue up 0.2%, slightly above the previous year • Q4 growth somewhat higher at +0.8% MAIL & BRANCH NETWORK: 1,510.3 -1.5% 1,487.7 • Revenue drop of 1.5% in 2014 due to electronic substitution and de
Slide 6: Improved EBIT Level
IMPROVED EBIT LEVEL GROUP: EBIT DEVELOPMENT EUR m • Substantial rise in EBIT of 5.9% +5.9% • Earnings development impacted by special effects 196.9 186.0 MAIL & BRANCH NETWORK: • EBIT decline of 4.2% in 2014 -11.8 • Revenue drop and impairment losses on -14.6 +37.3 goodwill in CEE/SEE PARCEL & LOGIS
Slide 7: 2. Strategy Implementation
1. Highlights and Overview 2. STRATEGY IMPLEMENTATION 3. Group Results 2014 4. Outlook 2015 INVESTOR PRESENTATION I Investor Relations I Vienna, March 2015 7
Slide 8: Clear Strategic Priorities
CLEAR STRATEGIC PRIORITIES DEFENDING MARKET LEADERSHIP PROFITABLE GROWTH IN IN THE CORE BUSINESS SELECTED MARKETS Further consolidation of strong market Performance enhancement and leverage position of market potential ENHANCING EFFICIENCY AND CUSTOMER ORIENTATION AND FLEXIBILISATION OF THE COST INN
Slide 9: Market Environment in the Mail Business in International Comparison
MARKET ENVIRONMENT IN THE MAIL BUSINESS IN INTERNATIONAL COMPARISON ONLY MODERATE VOLUME DECLINE IN AUSTRIA IN INTERNATIONAL COMPARISON ADDRESSED MAIL VOLUME PER CAPITA IN 2013 VOLUME DECLINE CAGR (2008-2013) Royal Mail 207 -6.3% Österr. Post Letter Mail Direct Mail 186 -2.9% PostNL 180 -8.4% bpost
Slide 10: Development of Mail Volumes in Austria
DEVELOPMENT OF MAIL VOLUMES IN AUSTRIA LETTER MAIL (millions of items) DIRECT MAIL/MEDIA POST1 (millions of items) • Basic trend towards electronic substitution is • Volumes in 2014 at the prior-year level in spite of continuing lower revenue effects from elections • Positive effects from elections
Slide 11: Price Adjustment for Letter Mail in 2015
PRICE ADJUSTMENT FOR LETTER MAIL IN 2015 INFLATION-LINKED ADJUSTMENT OF POSTAL RATES FOR LETTERS AS OF MARCH 2015 • First increase in postal rates since the product POSTAGE FOR STANDARD DOMESTIC reform in 2011 LETTERS • Increase reflects inflation rate over the past years Denmark 1.34 • Rise in post
Slide 12: Positive Revenue Effects from Elections
POSITIVE REVENUE EFFECTS FROM ELECTIONS 2013 2014 2015 • National elections • EU elections • 4 elections to state • 4 elections to state parliaments • Chamber of Labour election parliaments (Vienna, Upper (Carinthia, Lower Austria, Tyrol Austria, Styria, Burgenland) • 1 election for the state and Sa
Slide 13: Market Environment on the Austrian Parcel Market
MARKET ENVIRONMENT ON THE AUSTRIAN PARCEL MARKET VOLUME DEVELOPMENT OF THE ENTIRE MARKET SHARES BY VOLUME MARKET B2C/C2C B2C/C2C 2013 +2.6% 23% 2014 +4.8% 77% 2015e +5.0% Austrian Post B2B B2B Competitors 2013 -0.1% -0.9% 28% 2014 72% 2015e +0.9% • Strong volume growth of private customer parcels •
Slide 14: Parcel & Logistics Business in Austria
PARCEL & LOGISTICS BUSINESS IN AUSTRIA PARCELS AUSTRIA (millions of parcels) Trends and pilot projects Expansion of Same day delivery Austrian-wide next- and evening delivery Ø+7.2% day delivery +5.6% 70 74 E-commerce 65 Food logistics Fulfillment services 59 56 2010 2011 2012 2013 2014 INVESTOR PRE
Slide 15: Growth in Selected Markets
GROWTH IN SELECTED MARKETS INTERNATIONAL PARCEL AND MAIL GROWTH MARKETS WITH FUTURE SUBSIDIARIES POTENTIAL PARCEL BUSINESS • Parcel subsidiaries in 9 and mail subsidiaries in 8 countries • Substantial revenue increases and enhanced • Leading market positions in relevant market profitability in CEE/S
Slide 16: Volume Development in the International Parcel Business
VOLUME DEVELOPMENT IN THE INTERNATIONAL PARCEL BUSINESS INTERNATIONAL PARCELS (millions of parcels)1 STRATEGIC STAKE IN TURKEY • Ongoing focus on qualitative growth in Germany • 25% shareholding in Turkey’s second • Positive volume development in CEE/SEE largest parcel services provider • Option for
Slide 17: Germany: Increased Efficiency and Focus on Pharmaceuticals
GERMANY: INCREASED EFFICIENCY AND FOCUS ON PHARMACEUTICALS CONSISTENT IMPLEMENTATION OF EFFICIENCY ENHANCEMENT PROGRAMME • Reorganisation of organisational structure and logistics processes • Take over of distribution companies: about 50% of transport operations under direct control Target: Control
Slide 18: Systematic Investment Programme
SYSTEMATIC INVESTMENT PROGRAMME FUTURE INVESTMENTS TO ENHANCE EFFICIENCY AND CUSTOMER ORIENTATION CAPEX 2014: Sorting technologies EUR 82.6m Replacements in vehicle fleet 9% 23% 32% 20% 16% Branch network and self-service Technical plant and machinery, Capacity expansion assets under construction Pr
Slide 19: Optimisation of the Cost Structure
OPTIMISATION OF THE COST STRUCTURE FULL TIME EQUIVALENTS IN THE CORE BUSINESS IN AUSTRIA (average for the period) Change in 2014: -627 FTE 21,003 –705 Civil servants 20,218 20,064 1,891 19,417 –438 Old CWA 18,790 2,490 3,350 +516 New CWA 3,858 4,374 = –627 Employees 7,883 7,247 6,788 6,230 5,792 11,
Slide 20: High Quality Standards Increase Customer Satisfaction
HIGH QUALITY STANDARDS INCREASE CUSTOMER SATISFACTION E+1 LETTER MAIL DELIVERY TIME CUSTOMER SATISFACTION Legal requirements: 96.0% 95.5% 96.3% “Customer Satisfaction Index” of delivery of 95% of all Austrian Post compiled quarterly letters on the next (N=1.000) working day 67 68 2012 2013 2014 65 F
Slide 21: Customer Orientation and Innovation
CUSTOMER ORIENTATION AND INNOVATION ONGOING ROLL-OUT OF INNOVATIVE 24/7 SELF-SERVICE SOLUTIONS Franking machine & Pick-up stations Pick-up boxes drop-off boxes 260 self-serv. zones 126 pick-up stations 8,415 pick-up boxes Target in 2015: 300 Target in 2015: 200 Target in 2015: 11,000 INVESTOR PRESEN
Slide 22: Innovative Online Customer Solutions
INNOVATIVE ONLINE CUSTOMER SOLUTIONS MOBILE 24/7 POST SERVICES POST APP • E-notification via Post App • Redirection of parcels to branch office or pick-up station, neighbour or storage at home • Service functions such as track & trace, branch office, letter box and postal code locator, rate calculat
Slide 23: 3. Group Results 2014
1. Highlights and Overview 2. Strategy Implementation 3. GROUP RESULTS 2014 4. Outlook 2015 INVESTOR PRESENTATION I Investor Relations I Vienna, March 2015 23
Slide 24: Financial Indicators 2014 at a Glance
FINANCIAL INDICATORS 2014 AT A GLANCE 2013 2014 Revenue (EUR m) 2,366.8 2,370.5 Revenue slightly above the previous year (+0.2%) EBITDA margin of 14.1% strongly impacted by EBITDA margin 12.9% 14.1% special effects EBIT margin 7.9% 8.3% Ongoing high level of profitability Earnings/share (EUR) 1.82 2
Slide 25: Significant Earnings Effects in 2014
SIGNIFICANT EARNINGS EFFECTS IN 2014 Special effects Earnings effect COMMERCIAL Sale of former corporate headquarters in plus EUR 62.4m PROPERTIES Vienna (Postgasse) TRANS-O-FLEX GROUP Impairment loss on goodwill of the minus EUR 38.9m GERMANY trans-o-flex Group Write-downs on receivables as well as
Slide 26: Key Income Statement Indicators
KEY INCOME STATEMENT INDICATORS Change EUR m 2013 2014 % abs. Q4 2013 Q4 2014 Revenue 2,366.8 2,370.5 0.2% 3.7 632.6 637.9 Sale of former corporate Other operating income 69.7 134.4 92.9% 64.8 19.5 84.3 headquarters with positive effect of EUR 62.4m Raw materials, consumables -753.3 -744.5 -1.2% -8.
Slide 27: Mail & Branch Network Division: Revenue Development in 2014
MAIL & BRANCH NETWORK DIVISION: REVENUE DEVELOPMENT IN 2014 LETTER MAIL & MAIL SOLUTIONS (EUR m) DIRECT MAIL/MEDIA POST (EUR m) • Basic trend of e-substitution is continuing; decreases • Pressure of online business on retail stores and for example in the banking customer segment traditional mail ord
Slide 28: Mail & Branch Network Division: Key Income Statement Indicators
MAIL & BRANCH NETWORK DIVISION: KEY INCOME STATEMENT INDICATORS Change EUR m 20131 2014 % abs. Q4 20131 Q4 2014 Revenue 1,510.3 1,487.7 -1.5% -22.6 402.9 402.0 Solid revenue development featuring • Letter Mail & Mail-Solutions 793.1 790.5 -0.3% -2.7 212.6 210.0 slight decline • Direct Mail 441.8 431
Slide 29: Parcel & Logistics Division: Revenue Development 2014
PARCEL & LOGISTICS DIVISION: REVENUE DEVELOPMENT 2014 REVENUE (EUR m), REGIONAL MIX (%) +3.1% 855.6 882.0 SOUTH EAST/EASTERN EUROPE: +10.7% CEE/SEE 8.3% +10.7% 9.0% • Strong revenue growth and further productivity increases • Good development in Slovakia and Croatia Austria 34.5% +6.5% 35.6% AUSTRIA
Slide 30: Parcel & Logistics Division: Key Income Statement Indicators
PARCEL & LOGISTICS DIVISION: KEY INCOME STATEMENT INDICATORS Change EUR m 20131 2014 % abs. Q4 20131 Q4 2014 Revenue 855.6 882.0 3.1% 26.4 229.4 235.6 Revenue increase of 3.1% in 2014 • Premium 643.0 658.4 2.4% 15.5 169.4 172.2 • Standard 181.4 188.2 3.8% 6.9 51.5 54.0 • Other Parcel Services 31.3 3
Slide 31: Sound Balance Sheet Structure
SOUND BALANCE SHEET STRUCTURE BALANCE SHEET AS OF DECEMBER 31, 2014 (EUR m) 1,671.0 1,671.0 Other financial liabilities 17.7 Cash and cash Financial liabilities of only equivalents/Securities 317.3 EUR 18m Liabilities/ 410.1 Financial assets/ Other1 119.7 Liquid financial Investment property1 resour
Slide 32: Robust Cash Flow
ROBUST CASH FLOW CASH FLOW DEVELOPMENT EUR m Cash flow from operating activities below Free cash flow at the 2013: wage-related contributions from previous prior-year level: 283.3 periods and lower reduction in receivables “dividend well covered” 232.2 +2.1 +13.0 162.8 151.7 -82.6 -2.0 Gross cash Ca
Slide 33: Current Real Estate Projects
CURRENT REAL ESTATE PROJECTS DEVELOPMENT OF REAL ESTATE PORTFOLIO IN ACCORDANCE WITH THE PRINCIPLES OF EFFICIENCY AND VALUE ENHANCEMENT Old company headquarters: Postgasse 1010 New company headquarters: Rochusmarkt 1030 • Sale to the Soravia Group in December 2014 • Existing building with 10,000m² f
Slide 34: Dividend Policy
DIVIDEND POLICY ATTRACTIVE DIVIDEND POLICY WILL BE MAINTAINED • Dividend proposal to the Annual General Meeting: EUR 1.95 per share 1.951 1.90 1.80 • Dividend yield as at December 31, 1.70 1.60 2014: 4.8% 1.50 • Dividend policy: distribution of at least 75% of the Group net profit • Dividends should
Slide 35: 4. Outlook 2015
1. Highlights and Overview 2. Strategy Implementation 3. Group Results 2014 4. OUTLOOK 2015 INVESTOR PRESENTATION I Investor Relations I Vienna, March 2015 35
Slide 36: Outlook 2015
OUTLOOK 2015 • Ongoing drop in mail volume due to electronic substitution; international trends in addressed mail of minus 3-5% Market • Differentiated volume development of direct mail items (pressure on retail environment stores and mail order business) • Growth in private customer parcels of 3-6%
Slide 37: Contact
CONTACT Austrian Post Financial calendar 2015 Investor Relations March 12, 2015 Annual results 2014 Haidingergasse 1, 1030 Vienna April 15, 2015 Annual General Meeting 2015 Website: www.post.at/ir April 29, 2015 Ex-dividend day/Dividend E-mail: investor@post.at payment date Phone: +43 57767-30401 Ma
Slide 38: IF IT REALL
IF IT REALL UNTS; RELY ON STRIAN POST.